CLOSED CAPTION BY YOUTUBE! subject to deals I like them better when we're talking about a property with high
equity and this doesn't sound like it sounds like hey this is a lot coming to
you live from my Empire Pro Studios on the road I'm still out here in Long
Island but I got something I want to share with you really quickly and let's
get into it there's about four different questions
that I'm gonna answer today in fact the topic of this video is
Realtors and subject to failure with driving $4
Realtors and failure sorry Realtors and subject to failure would
drive $4 so there are questions here about subtitles working with Realtors
and rather for dollars and it's kind of for there's a lot more fun to go through
questions and answers and just answer the questions and the way I answer the
questions are not designed to be the end-all be-all but I want you to think
okay I just want to force you to think about some of these things okay but
don't forget to download the book smart real estate wholesaling calm that's
where you can find the full book and you need to read the book 10 to 15 times to
grasp the full concept of the things that I share with you and why they work
okay alright so the first question goes I was able to take over a property
subject to $5,000 in California my org unit taught was to fix and flip but now
I'm thinking of keeping the property for myself and pass it on to my daughter
there's a ninety seven thousand dollars loan and needs about sixty thousand
dollars to rehab all right so listen $97,000 long that needs about sixty
thousand dollars to rehab the reason for this change of heart is
because I live in the Bay Area but the property is two hours away in a small
town I rent a room for $800 and I've never owned a house what do you guys
think smart to keep it or is it the better business decision to fix and flip
by the way I have yet to do a deal so newbie here how'd your mineral that's
a different question so let's answer this one first
okay so subject to for $5,000 so you have to spend $5,000 up front okay and
this is ninety seven thousand dollars long way people talk about subjectivity
always assume at the back of their mind that there's no obligation there are
gonna be obligations attached to that ninety seven thousand dollars long I get
it you don't have to pay just pay the
monthly payment right and you just paint the monthly payment and I get it that
you're paying down the equity but now you're talking about this so sixty
thousand dollars we have that's additional work so in total you're gonna
be spending sixty five thousand dollars up front there's gonna be a lien of
ninety seven thousand dollars against the property okay
so even if you're sixty five thousand dollars is instant equity in the
property still doesn't justify for ninety seven thousand dollars of lien
against the property but it's not real cash you're paying down it alone and
hopefully everybody stays lawyer to that contract and you know I should pay down
the loan you continue to own the property now you can take the deed right
you're taking the deed from the owner was subject to existing loan and in
hopes that you will continue to pay ninety seven or so the only obligation
you have is ninety seven thousand dollars so if we do that math from
mortgage calculator to all the calculator dot org
let's see what's the obligation here okay and remember there are gonna be
taxes and things like that as well on the property
okay so ninety seven thousand dollars I put this at zero okay all right so you
end up with four hundred and sixty three well we're gonna put the percentage at
five percent okay you ended up at around five hundred
twenty five dollars a monthly payment of mortgage but there's also you know
interest taxes and insurance right so you definitely want to take that into
consideration well you paid sixty five thousand dollars up front for this
property if you go into the regular market and you purchase a property for
$65,000 same scenario you'll be paying three forty nine dollars every month
okay so now the only reason why this will be
a good deal right is if you have such a bad quite right but if you're trying to
flip the property if you flip the property somebody has to pay fourteen
ninety seven thousand dollars does that make sense unless you find a subjective
person to flip it to so now how much are they willing to pay you another five
thousand dollars maybe okay so that person will end up with seventy thousand
dollars right I'm a hippie have a ninety seven thousand dollars so there's really
one little missing information here and I see a lot of people talking about
subject to without because they think it doesn't matter right but it always
married he should find out what the after repair value of the property is so
if there's a ninety seven thousand dollars old against a two hundred fifty
thousand dollars worth a house right now I would definitely want to take a look
and see what's going on if there's a ninety seven thousand dollars old
against a property that's appraised at fifty thousand dollars then I would
definitely be site I am the deal and walk away right but because a subject to
stop trying to avoid the HRV conversation after repair after repair
value that's really really a big deal and you
need to find out what that is especially when you're talking about total cost of
acquisition being very close to what the mortgage notice actually worth which is
ninety seven thousand dollars no right so you need to know what that is before
we can determine if this is even a deal or not
right then also when you're talking about subject to properties now you
start to talk about you want to live in the property the idea here is that you
rent it out and they spread the arbitrage between how much a tenant is
pain and how much your pain on the existing loan that's really really the
juicy part right then you miss that out by saying you're falling in love and you
may decide you want to live in this property because you have $800 that you
pay for a rental well you pay 800 for that rental but you're not attached to
any obligations with that rental so it's not the same value you really should not
be falling and mutuality heads of what you with deals that's really the key
thing here let's go on to the next question here I'm working on a closing
on a subject to deal another subject to do the seller asked if they can still
deduct interest from the mortgage since the debt remains in their name on
the mortgage statement a large portion of the monthly payment represent
interest a smaller portion for principle taxes and insurance you know why because
the mortgage is not well matured and the mortgage is young it's probably a few
years into it because a few years into mortgage most of the money goes towards
interest right and towards the end of a 30-year mortgage most of the money goes
towards principal right so subject to deals I like them better when we're
talking about a property with high equity and this doesn't sound like it
sounds like a fresh mortgage that was taking not so long ago and it sounds
like there's no true way to add value to this deal already okay because at the
end of the day you make money when you have value to the mark
place if you're not hiding some type of value there's no money to be made
typically mostly especially if you talk about sustainable money to be made okay
I'm almost certain that they cannot deduct the mortgage interest on their
taxes no they can't honestly you know because once you do that you call the
attention of the bank to the fact that you're changing hands and then you can
trigger what they call the due on sale clause okay which means they have the
power to say you change the deed somebody else has the deed where you owe
us $300,000 now okay and that's not the whole idea here the idea is do not have
to trigger that clause okay you want to keep everything moving smooth the way it
was without touching interest taxes or ever like it sounds like it was an
escrow it was being paid into escrow so that the bank can take care of it I
wouldn't touch any of that you need to roll all of that with your numbers all
right so and because the deed is now in my name just wanted to get confirmation
that I'm looking at this correctly and clarifications from other experience of
the two professionals please help things know the idea is subject to existing
mortgage payment that means piti hi I'm its principal interest taxes in charge
okay so yeah I'm calling I'm calling about a property okay so there's another
question sorry so yeah I'm calling let's see here okay
so these are shorter questions let me see if I can fly through them so yeah
I'm calling about the property from my unlisted number and they have a block on
accepting my calls okay so if it's not a listed number they have
a block on asserting your cause what the hell am I supposed to do I
don't want this mofos knowing my real number is there a workaround well I
don't understand why you don't want them to know your real number really if you
receive a lead you should be calling with your real number what are you
hiding call with your real number tell them you
have an offer for their property and buy the house put the house on the contract
and flip it for a nice 510 a thousand dollars day right why are you
hiding your number if you have to hide your number that means you're not
confident that this business is legal or it's legit then you really shouldn't be
doing it because they can tell your energy okay so that's that again here's
other questions so newbie here oh yeah I make $300 a week obviously not big money
to buy a house say is whoo not even myself
not even for myself what is the first steps I should take first step is to
educate yourself you need the education invest in your education you got $300
you can do a whole lot with that you make 300 hours per week that's exactly
how I started I used to work for FedEx I was making 300 dollars per week I said
college student and yeah I didn't have a family though so but $300 can go far
because basically the first step is to invest in your education at that level
and you need to do that and I would do that for at least 90 days investing in
my education I have a book that I'm writing right now is I'm on chapter 9
it's about 15 chapters it's called real estate money secrets and in that book
there's tons of ways to make money in real estate and every real estate to
improve your financial profile all right so it's you know it's so you can do this
a lot you can do with three hundred dollars per week so we think that and
that will come from education so invest in your education all right so last but
not least here or no actually I have got two more questions to answer if it's
Ella is potentially interested in working with you but they currently are
working with the realtor the seller says the realtor is taking too long and they
are ready to sell okay they're motivated right how do you handle it well we need
to talk numbers okay if they are motivated to sell right now let's see
about 65 percent off after repair value will they accept that or less how much
do they owe would they accept how much they owe or less that's one we talk
about motivation okay if somebody is now willing as a host selling real estate
professional if somebody is now willing to accept sixty five is
of what the property is worth - the repair cost right or if they're all much
more than that if they're not willing to accept what they owe and nothing more
then they're not really motivated okay all right so you just need to be careful
about your definition of motivation and a lot of people say motivation
especially wholesalers and they're talking about just because somebody want
to sell get motivated just because they want to sell doesn't media motivated at
least not to the standard of what you need to do to make your business work
okay so we need to talk numbers that will be how I handle it look at the
numbers put my offering and get it yes or no if you say no I would say this is
why I gave you that offer you know I give that offer because this is a
business for us and we have to make money because we're gonna do some
repairs and it's gonna take time for the house to sell on the market because of
that we cannot pay more than this if they're motivated doing wrong with it
okay so another question here can they just get out of the contract with the
realtor if they want the offer and the offer you just presented if they want to
work with the row top then they have to pay their route oh that's a fee out of
their pocket if they don't want to pay their route or they have to make
decisions on their own if they want to fire their rotor or not but again that
would based on the number of offer or do not vary any offer that I give them okay
so you know money talks you know let's talk money and see the number works for
you if the number work for them they can decide that they want to save that 2.53
present realtor that will be their decision to make that's not really a
problem to worry about so ethically like you asked it do you
try to convince to wait it out no I don't try to convince anybody to wait
nothing out if it's a deal on the table right now - and money to be made and
make somebody happy that's making money ethically as far as the loyalty to the
other realtor that's up to them completely because you don't have any
obligations to the realtor they do and it's up to them if they want to honnor
that or not I'll tell you this much clients honor that based on how they
feel about the service has been offered so they have the right to pull in or
pull out of the situation if they don't feel being
served at the end of day is about the service okay do you try to get them to
work with you no I won't go I don't get into sales mode I just offer what I have
and I maintain my posture and I use attraction marketing okay because I
maintain my posture okay that's what's gonna make them attracted to working
with me if I'm confident and what I just offer them and they feel like that's the
only choice they have right now then do either wrong with me or decide
to be lawyer to the realtor who hasn't really provided them or serve them right
provided them with a service or serve them alright so I wouldn't it's none of
your business their loyalty to the route or you know I just give them my offer
and let me decide if they want to pay some of that money to a route or they
want to keep all of it is completely up to them okay that's how I work the
seller pays the route or a certain percentage that they are agree in their
listing contract okay can use to do such deals and make money yes by me remaining
in your posture if you try to force anything you can lose the deal can the
campaña can say what are you doing we don't know what they understand
wholesaling we do that's going people back out of things like that and even if
people decided we don't understand even with you remaining
cool and calm it doesn't matter because you have a pipeline you have people
calling you all the time you're always marketing and it's just one so many
leads that you're getting if you're doing this the right way if you don't
know what marketing in real estate wholesaling is download my book and go
all the way through the funnel and find a way to talk to me so I can help you
get you to your first deal okay as fast as possible last but not least question
to answer here out driving for dollars today have been trying to get in contact
with the owner the number doesn't work not delinquent on taxes okay what would
you do next I'm still trying to figure this out new is a newbie okay awesome as
a newbie it's a beautiful place to be there's too many non newbies and not
making money the ears are blocked because the then
there's a clogged up with too much information information overload and
they're not taking action or they're not marketing okay for you that's a good
thing that you're not always hoping always so you're driving for dollars you
find a property maybe overgrown weed and things like that and you couldn't you
need to have one source that you use to try to find the contact if you can't
find it in that one source to find it if you want you can have additional sources
you can have up to three four five bottom line is that you need to turn
this to a system you have three or four to five places where you look up what's
information you can't find the information you need to move on to the
next lead the idea is for you to have options if you can't find the
information as fast as possible move on to the next lead you don't have time
generate enough leads so that you can move on to the next lead if you're not
generating enough leads you get desperate about one particular house
that you found on the block you're not gonna make money this is a numbers game
you need leads coming you need to build a pipeline that leads are coming in
every day aka you need to learn how to market so
if you want to learn how to do that you wanna do to hear the book is absolutely
for free smart real estate wholesaling comm that's where you want to go
download the book absolutely for free if you want the option of audible.com you
want the option of people back that option is over there as well to just go
to smart real estate wholesaling comm hopefully you'll be enlightened and
educated you like this video please give it a thumbs up and smash that like
button and please leave your comments if you have any questions anything like
that you can see I really really enjoy answering this question and I try to be
as straightforward as possible and much you could quote anything for you this is
real business this is real work and it takes real skills to make money in it a
long time I'm not talking about the lucky ones that that post one deal I'm
talking about a long time creating a business out of this okay and again like
I said hopefully be elated educated now see you on the next
and he
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